What is the purpose of life insurance?

The main purpose of life insurance is to offer financial support to beneficiaries following the death of the insured individual. This financial support can help cover various expenses, such as funeral costs, outstanding debts, and ongoing living expenses for dependents. By providing a death benefit, life insurance ensures that loved ones are not left in a difficult financial situation and can maintain their quality of life after the loss.

Other options, though they may seem relevant in certain contexts, do not accurately represent the core function of life insurance. For example, while it might help cover certain education expenses, education funding is not its primary purpose. Similarly, life insurance does not directly cover healthcare costs during retirement or guarantee loan approvals, as those areas are typically addressed through other financial products and strategies. The focus remains on supporting beneficiaries financially upon the death of the policyholder, which is why the chosen answer effectively captures the essence of life insurance.